SHREE SHAGUN FINANCIAL SERVICE ,MUMBAI vs. DCIT CIRCLE 19(3), MUMBAI

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ITA 6975/MUM/2024Status: DisposedITAT Mumbai21 April 2025AY 2014-15Bench: SMT. BEENA PILLAI (Judicial Member), SMT. RENU JAUHRI (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal before it and the CIT(A), citing a reasonable cause due to partner disputes and SEBI investigations. The Tribunal set aside the CIT(A)'s order and directed him to decide the appeal on merits.

What were the facts?

The assessee did not file its return for AY 2014-15. Based on information about high-value transactions, a notice u/s 148 was issued. The AO treated Rs. 7,14,84,999 as unexplained cash credits u/s 68, passing an order u/s 147 r.w.s 144B. The CIT(A) dismissed the appeal in limine due to delay.

What were the issues?

Whether the delay in filing the appeal before the lower authorities was a reasonable cause, and whether the appeal should be decided on merits instead of being dismissed in limine.

Which sections of the Income-tax Act were involved?

Section 250,Section 148,Section 68,Section 147,Section 144B

AI-generated summary — verify with the full judgment below

Before: SMT. BEENA PILLAI & SMT. RENU JAUHRI

For Respondent: Ms. Kavitha Kaushik (SR DR)
Hearing: 09.04.2025

सुिवधई की िधरीख / Date of Hearing 09.04.2025 घोर्णध की िधरीख/Date of Pronouncement 21 .04.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 10/04/2023 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2014-15.

2.

The assessee has raised the following grounds of appeal:

1. On the fact and circumstances of the case, the opening of the case itself is against the Law. as there is no Income Escaped above Rs 5000000.00 The case cannot be opened beyond 4 years after the expiry of the relevant Assessment Year.

2. On the fact and circumstances of the case, The order passed by Learned AO is based on surmises and bad in law and against the principles of Natural Justice. Based on the facts and circumstances of the case and further as per the explanation provided, the learned AO grossly erred in adding Rs. 71484999.00.

3. On the Facts and in the circumstances of the case Ld. Assessing Officer has erred in making the addition of Rs 71484999.00 which was received from its partners as unexplained cash credits U/s 68. Hence the order Ld officer has completely erred in adding the amount in the hand of the Firm.

4. The learned AO ought to have appreciated the fact that before adding a huge amount shall call for information from banks too and put some onus on bank statements where its clearly visible that funds were received from the Partners.

5. The order passed by the learned office is against the natural principle.

6. The appellant craves leave to add, amend or modify any or all the above-referred rounds of appeal before or at any time of the hearing.”

3.

Brief facts of the case are that the assessee had not filed its return of income for the year under consideration. Based on information regarding high- value transactions of funds in the bank account of the assessee, a notice u/s 148 was issued by the Ld. AO. As the assessee could not explain the nature and source of the impugned transactions, Ld. AO treated the entire amount of Rs. 7,14,84,999/- as unexplained cash credits u/s. 68 of the Act vide order u/s 147 r.w.s 144B of the Act dated 10/04/2023. Aggrieved with the order of Ld. AO, the assessee preferred an appeal before Ld. CIT(A). Since, the appeal was delayed by almost one year and Ld. CIT(A) was not satisfied with the reasons given by the assessee, he dismissed the appeal in limine vide order dated 06/08/2024.

Aggrieved with the order of Ld. CIT(A), the assessee has filed an appeal before the Tribunal.

4.

At the outset, it is seen that the appeal is delayed as the same has been filed on 31/12/2024 i.e. beyond the prescribed time limit of 60 days from the date of impugned order i.e. 06/08/2004. The assessee has submitted that it had incurred huge losses during the relevant period and SEBI had also conducted enquiries against it. Due to dispute among the partners, they had to go for arbitration and the issue has been settled only recently. Under these circumstances, there has been a delay in filing of appeal before the Tribunal as well as before the CIT(A).

5.

In view of the explanation given by the assessee we hold that there was a reasonable cause for delay in filing of the appeal before us and the same is hereby condoned.

6.

Before us, the Ld. AR has reiterated that since there was an ongoing dispute between the partners and a ban was imposed by SEBI on its activities hence, proper representation could not be made before the lower authorities. He has, therefore, requested that the matter may be remanded back for fresh consideration. Ld. DR has not opposed the said proposition of the Ld. AR.

6. After careful consideration of the facts and circumstances, we are of the view that there was a reasonable cause for the delay in filing of appeal before the Ld. CIT(A) as well and therefore he should have considered the same and decided the appeal on merits instead of dismissing it in limine. We therefore, set aside the order of Ld.CIT(A). He is directed to pass a fresh order on merits after giving due opportunity to the assessee.

7.

The appeal is accordingly allowed for statistical purposes. Order pronounced in the open court on 21.04.2025.

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